Petco Barks Up The Right Tree, Gets Upgrade From BofA Analyst

Petco Barks Up The Right Tree, Gets Upgrade from BofA Analyst

(Photo by Jay Wennington on Unsplash)

After posting robust fourth-quarter results, Petco Health and Wellness Company Inc (WOOF) has been witnessing continued elevated pet adoption trends, according to BofA Securities.

The Petco Analyst: Elizabeth Suzuki upgraded the rating for Petco from Neutral to Buy, while maintaining the price target at $28.

The Petco Thesis: With people spending more time at home amid the COVID-19 pandemic, there has been accelerated adoption of new pets, which is expected to “provide a multi-year tailwind for specialty pet supply retailers,” Suzuki said in the upgrade note.

She expects the elevated adoption rates to continue “even in a post-vaccine environment,” with a large percentage of people still working from home or transitioning to a “hybrid home/office schedule” and a rise in demand for homes with more space.

Petco is poised to benefit from “industry-demand tailwinds, recovery in services as markets reopen, and longer-term growth across the chain’s services, online, and in-store merchandise offerings as new customers become multi-channel shoppers,” the analyst further wrote.

WOOF Price Action: Shares of Petco had risen by 2.97% to $23.20 in premarket trading Friday.

© 2021 Benzinga does not provide investment advice. All rights reserved.

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